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The Breakfast Briefing: Dow Set To Drop 200 Points At The Open As Worries About Italy Roil Markets
FYI: Traders also assess efforts to save U.S.-North Korea summit, ongoing political uncertainty in Spain
U.S. stock futures pointed to a sizable drop at the open Tuesday, as traders getting back to work after a three-day weekend were greeted by fresh Italian political drama.
Another Italian election looks likely within a few months, and it might lead the eurozone’s third-largest economy toward ditching the shared currency — which would represent quite a shakeup to the status quo.
This past week I noticed that some of my risk off type assets within my portfolio were starting to find traction while some of the risk on type assets were starting to falter as commodities went soft while bonds found traction. I'm thinking stocks may start to slide next as we move into summer. Seems, a seasonal shift might be coming where stocks go soft during the summer months.
I'm thinking stocks may start to slide next as we move into summer. Seems, a seasonal shift might be coming where stocks go soft during the summer months.
Years back before I developed my market barometer and equity weighting matrix system I cut my stock allocation by about 5% during the summer months. And, come fall I'd overweight it. Today, I let the matrix be my guide (along with a few other indicators) in setting my equity allocation weighting within my portfolio.
I'll explain.
Currently, my equity weighting is around 52% to 53% of my portfolio with the high range being 60% and the low range being 40%. Generally, I move between these percentages (45% to 55%). The movement of the barometer reading drives the equity weighting matrix's suggested portfolio's equity allocation. Should stocks go soft during the summer I look for the barometer to key on this softness thus raising the suggested equity allocation in the matrix. As of now, I'm not reducing my equity allocation because it is already inline with what the matrix is calling for. It is indeed possible I will add to my equity allocation later in the summer should softness in stocks develop.
Remember, the three main feeds of the barometer are an earnings feed, a breadth feed, and a technical score feed. Although I will not be posting weekly barometer readings during the summer months should market conditions warrant I'll make a special post plus doing summer monthly postings.
Comments
Speaking of “seasonal” - Are you still following the “Sell in May” mantra as, if memory serves, you have normally done in past years?
Thanks.
Thanks for the question.
I hope all is well with you and your family.
Years back before I developed my market barometer and equity weighting matrix system I cut my stock allocation by about 5% during the summer months. And, come fall I'd overweight it. Today, I let the matrix be my guide (along with a few other indicators) in setting my equity allocation weighting within my portfolio.
I'll explain.
Currently, my equity weighting is around 52% to 53% of my portfolio with the high range being 60% and the low range being 40%. Generally, I move between these percentages (45% to 55%). The movement of the barometer reading drives the equity weighting matrix's suggested portfolio's equity allocation. Should stocks go soft during the summer I look for the barometer to key on this softness thus raising the suggested equity allocation in the matrix. As of now, I'm not reducing my equity allocation because it is already inline with what the matrix is calling for. It is indeed possible I will add to my equity allocation later in the summer should softness in stocks develop.
Remember, the three main feeds of the barometer are an earnings feed, a breadth feed, and a technical score feed. Although I will not be posting weekly barometer readings during the summer months should market conditions warrant I'll make a special post plus doing summer monthly postings.
Thanks again for the question.
Old_Skeet